Sao Paolo, Brazil-based Galloway Emerging Markets has begun trading in its Galloway Brazilian Multi Manager Equity Fund, an equity long/short and long-only fund of funds focused on the Brazilian equity market. In its first four months, the fund is up some 12.7%, with about US$1.1 million in assets under management.
Galloway said the fund is intended to capitalize on Brazil’s favorable growth and liquidity compared to other Latin American countries. “For example, looking at the political side, we can not compare Brazil to Venezuela, Bolivia, Equator or Argentina,” the firm said. “In those countries, there is a high possible risk of populism. On the other hand, Brazil has been in a convergence route for the past 12 years with orthodox fiscal policy, growing foreign trade and floating exchange rate.”
Other factors that influenced Galloway include low inflation levels that support a continued reduction in real interest rates, a return on equity above domestic borrowing costs and Brazilian equities that are trading at a discount to other emerging markets.
The fund allocates 60% of its portfolio to long-only managers, with the balance geared toward long/short managers. Its underlying managers manage an estimated $9 billion in total assets.
The new offering charges a 1.5% management fee and 10% performance fee, with a minimum investment requirement of US$100,000 with subsequent subscriptions of US$25,000.
Galloway’s principals, Nathan Shor and Guillermo Bauder, founded the firm last year.